High Speed Rail Affirmative
AT: States CP – No Mechanism
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- Federal investment is not a choice – private investors ignore rail infrascture because they don’t care about public benefits and see potential gains as too long-term
- Government investment is key to quid pro quo private use
- Plan popular – bipartisan consensus
- Politically popular – ever major area benefits
- Money will be used efficiently and smart investment in high potential ridership areas will maximize fare recovery and minimize risk
- Public-Private partnerships cover funding start up for investments
- Public-private partnerships work
AT: States CP – No MechanismNEC has no mechanism to actPetra Todorovich et al, Daniel Schned, and Robert Lane, director of America 2050, associate planner for America 2050 and senior fellow for urban design at Regional Plan Association and founding principal of Plan & Process LLP, “High-Speed Rail International Lessons for U.S. Policy Makers”, Lincoln Institute of Land Policy, 2011 California’s 2008 bond measure acted as a statewide referendum on high-speed rail, but there is no similar single mechanism for achieving a corridor-wide vote of confidence across the eight states and the District of Columbia in the Northeast Corridor. Building consensus among these jurisdictions and the federal government will require substantial research and public outreach, starting with studies that estimate the economic benefits of this project. Options for different alignments of the railroad also need to be evaluated for their relative ability to leverage rail investment for economic growth and minimize environmental impacts. AT: Privates CPFederal investment is not a choice – private investors ignore rail infrascture because they don’t care about public benefits and see potential gains as too long-termPhillip Longman, senior fellow at New America Foundation, “Back on Tracks: A nineteenth-century technology could be the solution to our twenty-first-century problems.” Washington Monthly, Jan/Feb 2009 Why don’t the railroads just build the new tracks, tunnels, switchyards, and other infrastructure they need? America’s major railroad companies are publicly traded companies answerable to often mindless, or predatory, financial Goliaths. While Wall Street was pouring the world’s savings into underwriting credit cards and sub-prime mortgages on overvalued tract houses, America’s railroads were pleading for the financing they needed to increase their capacity. And for the most part, the answer that came back from Wall Street was no, or worse. CSX, one of the nation’s largest railroads, spent much of last year trying to fight off two hedge funds intent on gaining enough control of the company to cut its spending on new track and equipment in order to maximize short-term profits. So the industry, though gaining in market share and profitability after decades of decline, is starved for capital. While its return on investment improved to a respectable 8 percent by the beginning of this decade, its cost of capital outpaced it at around 10 percent—and that was before the credit crunch arrived. This is no small problem, since railroads are capital intensive, spending about five times more just to maintain remaining rail lines and equipment than the average U.S. manufacturing industry does on plant and equipment. Increased investment in railroad infrastructure would produce many public goods, including fewer fatalities from truck crashes, which kill some 5,000 Americans a year. But public goods do not impress Wall Street. Nor does the long-term potential for increased earnings that improved rail infrastructure would bring, except in the eyes of Warren Buffett—who is bullish on railroads—and a few other smart, patient investors. The alternative is for the public to help pay for rail infrastructure. Actually, it’s not much of a choice. Unlike private investors, the government must either invest in shoring up the railroads’ overwhelmed infrastructure or pay in other ways. Failing to rebuild rail infrastructure will simply further move the burden of ever-increasing shipping demands onto the highways, the expansion and maintenance of which does not come free. The American Association of State Highway and Transportation Officials (hardly a shill for the rail industry) estimates that without public investment in rail capacity 450 million tons of freight will shift to highways, costing shippers $162 billion and highway users $238 billion (in travel time, operating, and accident costs), and adding $10 billion to highway costs over the next twenty years. "Inclusion of costs for bridges, interchanges, etc., could double this estimate," their report adds. Government investment is key to quid pro quo private usePhillip Longman, senior fellow at New America Foundation, “Back on Tracks: A nineteenth-century technology could be the solution to our twenty-first-century problems.” Washington Monthly, Jan/Feb 2009 If the public helps railroads make these investments in electrification and other infrastructure improvements, it will, of course, earn important quid pro quos. Railroads, for example, could be required to apportion a certain amount of their increased capacity to public use, such as for commuter trains, which the railroads might or might not operate themselves. (Some have shown interest.) It should also be possible to negotiate open access to publicly financed rail infrastructure. This would allow outside companies to rent the rails and run their own freight, package express, fast mail, or passenger trains on them. It would also be a good check on any tendency toward monopoly pricing and provide for many other synergies as well. In Great Britain, a subsidiary of Virgin Airlines called Virgin Trains operates passenger trains on publicly financed infrastructure, as do other private passenger and freight companies. Following this example would create something very much like the current interstate highway system: publicly financed transportation infrastructure maintained for the benefit of private operators. America’s major railroads are wary of the full, open-access model and want to retain ownership of their track. But with the promise of enough public capital and the threat of re-regulation, deals can be struck that will bring profound benefits across the economy. For example, there is no reason we cannot again have fast, efficient express freight service of the kind the Railway Express Agency once provided. For cities as far apart as New York and Chicago, trains can beat planes on next-day mail service. As consulting engineer Alan Drake points out, when passengers and express freight or mail are borne by the same train, the economics of passenger rail improve dramatically, making possible far wider service. We also have the chance to reduce drastically the cost and huge carbon footprint of using trucks and planes almost exclusively to ship perishables across the country. Until the 1970s, railroads handled nearly all fresh food movement from California and Florida, and could again, making healthy winter fruits and vegetables cheaper, and less hard on the planet. AT: Privates CPPermPetra Todorovich et al, Daniel Schned, and Robert Lane, director of America 2050, associate planner for America 2050 and senior fellow for urban design at Regional Plan Association and founding principal of Plan & Process LLP, “High-Speed Rail International Lessons for U.S. Policy Makers”, Lincoln Institute of Land Policy, 2011 Any of these options will face the difficult reality of the current political climate centered on austerity, in which large new infrastructure investments are easy targets for trimming government budgets. Under these conditions, direct government funding alone will not be sufficient to develop high-speed rail. Innovative financing solutions will require both the expansion of government subsidized financing options and private financing initiatives. AT: Politics DAPlan popularPhillip Longman, senior fellow at New America Foundation, “Back on Tracks: A nineteenth-century technology could be the solution to our twenty-first-century problems.” Washington Monthly, Jan/Feb 2009 Is all this politically feasible? Certainly more so than a year ago, before the consensus formed that we must invest massively in infrastructure of some kind. Importantly, too, we’re not talking about bailing out a failing industry, but about helping an expanding, more energy-efficient one to grow fast enough to meet pressing public needs. Nor would we be making big bets on unproven technology. Also, it’s important to remember that big trucking companies, facing acute driver shortages and mounting highway congestion, are increasingly shifting their containers to rail and so have an interest in improved rail infrastructure. With trucking companies morphing into logistics companies, it’s a new day in the special interest politics of freight. Finally, the proposal has an additional political advantage: it doesn’t involve pricing or guilt-tripping people out of their automobiles. Electrifying and otherwise improving rail infrastructure would indeed facilitate the coming of true high-speed rail passenger service to the United States, a goal Obama committed to as a candidate. But its success wouldn’t depend on persuading a single American to take the train instead flying or driving. Indeed, with its promise of making driving more enjoyable and less dangerous, the proposal bridges the divide between auto-hating, Euroland-loving enviros and those who see access to the open road as an American birthright. What could be more post-1960s? Mr. President, this is change we can believe in. Plan popular – bipartisan consensusMark Reutter, former editor of Railroad History and author of Making Steel: Sparrows Point and the Rise and Ruin of American Industrial Might, “Fast Track to the Future: A High-Speed Rail Agenda for America” Progressive Policy Institute, January 2010 Is Washington at last getting serious about implementing a fast train program? Yes and no. The growing bipartisan consensus in Congress that population growth and en ergy concerns make HSR an attractive mode of travel in 200- to 600-mile intercity markets is good news. This represents a historic shift in U.S. transportation policy, which has focused almost exclusively on air ports, highways and the family car since the 1920s.13 Politically popular – ever major area benefitsDavid M. Levison, Networks, Economics, and Urban Systems Research Group, University of Minnesota, Department of Civil Engineering research was funded by New York University “Accessibility impacts of high-speedrail,” Journal of Transport Geography, Volume 22, May 2012, Pages 288–291. Special Section on Rail Transit Systems and High Speed Rail These hub networks in the Federal High-Speed Intercity Passenger Rail Program includes the top 47 metropolitan areas of the United States (and many smaller ones), the largest city not in the Program (but apparently in the Vision) is Salt Lake City, Utah, at 50, with just over 1 million people in the metro area.2 The political genius of the intercity passenger proposal is that it includes lines in all but 8 of the 50 states.3 This is a practice learned in transportation from previous national packages, the Interstate Highway System (with miles in all 50 states, including special routes in Alaska and Hawaii) and Amtrak (nearly so), helping ensure strong support in the US Congress, especially the Senate. AT: Budget DAMoney will be used efficiently and smart investment in high potential ridership areas will maximize fare recovery and minimize riskYoav Hagler and Petra Todorovich, Associate Planner and Direcotr of America 2050, “Where High-Speed Rail Works Best”, America 2050, September 2009. Although investments in “mega” infrastructure projects are necessary to accommodate future population and eco nomic expansion, they are inevitably fraught with great risks because of the sheer scale of these investments. As the GAO recently observed, each of these high-speed rail systems will cost tens of billions of dollars of upfront costs to build the infrastructure before a single passenger pays a fare.16 The FRA’s focus on project readiness, local matching funds, and organizational capacity will help ensure that the first round of federal funding is awarded to agencies that are capable of delivering the projects on time and on budget. The success of early projects will help pave the way for the continued growth and expansion of the program by building public confidence and support. Yet, another factor in building public confidence and support is investing in corridors where the services will be in high demand. As discussed in this report, investing in corridors with the highest potential ridership—places with the appropriate density, economic activity, supportive transit, and existing travel markets—will maximize fare recovery and minimize project risk. The $8 billion appropriated for intercity rail projects represents a major commitment to intercity rail by the fed eral government. It will take many more of these appropria tions, however, to realize the ultimate goal. These initial federal investments in intercity rail should be directed toward corridors with the greatest demand for intercity travel. In general, this demand occurs in city pairs located 100 – 500 miles from each another, with large populations, economies, and the presence of regional and local transit networks that can provide connections for intercity pas sengers. America’s 11 emerging megaregions—networks of metropolitan regions connected by linked economies, travel patterns, and shared environmental resources—are among the prime areas suited for intercity rail investment. The success of these investments in attracting sufficient ridership to offset operating expenses and the ensuing public support for the projects selected for the first round of funding, will determine whether this is a one-time expenditure or a sus tained commitment by the federal government. Ultimately the FRA will need to develop a comprehensive strategic plan that details the federal role in the future high-speed rail network. The forthcoming National Rail Plan being prepared by the FRA and due to Congress on October 16 could serve this purpose. In the meantime, the FRA must have a mechanism for assessing the corridors with the great est potential return on this investment—the ranking system detailed in this report offers one such mechanism. AT: Budget DAPublic-Private partnerships cover funding & start up for investmentsPetra Todorovich et al, Daniel Schned, and Robert Lane, director of America 2050, associate planner for America 2050 and senior fellow for urban design at Regional Plan Association and founding principal of Plan & Process LLP, “High-Speed Rail International Lessons for U.S. Policy Makers”, Lincoln Institute of Land Policy, 2011 P U B L I C - P R I V A T E P A R T N E R S H I P S Public-private partnerships (sometimes referred to as P3s) generally constitute any arrangement between a government sponsor and a private sector entity in which the private entity provides one or more stages of the project delivery process—designing, building, operating, owning or leasing, maintaining, and financing parts of the infrastructure. These partnerships offer the benefit of flexibility to suit the specific needs of the public sector while encouraging different models of private involvement and investment (Geddes 2011). Public-private partnerships are considered an especially attractive solution for financing infrastructure projects. For example, the Florida Department of Transportation was already in the process of finding a private partner to design, build, operate, maintain, and finance the state’s high-speed rail line before the project was cancelled in February 2011 (Haddad 2010). Public-private partnerships workPetra Todorovich et al, Daniel Schned, and Robert Lane, director of America 2050, associate planner for America 2050 and senior fellow for urban design at Regional Plan Association and founding principal of Plan & Process LLP, “High-Speed Rail International Lessons for U.S. Policy Makers”, Lincoln Institute of Land Policy, 2011 While public-private partnerships are likely to increase in popularity as an option for cash-strapped governments, applying this approach to high-speed rail must be done carefully, with a realistic understanding of the benefits and challenges. Sharing risk: Partnerships allow the public sector to share project risks related to construction, environmental review, system performance, and ridership with their private partner. Properly assigning risk to the party best able to manage it is critical to a successful project. In general, private partners are better able to control construction and financing risk, and public partners are better able to manage political and entitlement risk. Ridership risk is shared by both parties, with the opportunity for both to benefit when ridership exceeds expectations. Attention to the private entity’s susceptibility to market downturns is also important. The private entity should not shoulder so much risk that it could endanger its ability to live up to the terms of the contract. Leveraging public investment: Leveraging public investment with private capital, either through the use of federal financing tools or availability payments, can help pay for high-speed rail’s large upfront costs. These mechanisms make large projects feasible without the need for the government to provide 100 percent public funding in advance. Federal financing tools include quali- fied tax credit bonds such as Build America Bonds, which can draw a wide variety of investors to contribute to transportation projects. Availability payments allow teams of construction and finance firms to begin construction of infrastructure projects through their own debt and equity. They later receive reimbursements from the government as particular milestones are reached. Faster project delivery: Private entities can draw on experience to deliver projects on time and on budget. They are also motivated by financial incentives for performance (including availability payments), which can be written into the structure of the deal. 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